Suzuki Announces Five-Year Business Plan

Suzuki announced a new mid-term management plan outlining its goals for the next five years leading up to the company’s 100th anniversary in 2020. The “Suzuki Next 100” plan outlines the company’s goal to return sales to above pre-recession levels.

The Suzuki Next 100 plan follows a three-part mission statement:

Develop products of superior value by focusing on the customer;

Establish a refreshing and innovative company through teamwork; and

Strive for individual excellence through continuous improvement.

The plan calls for shortening its development period, consolidating manufacturing and increasing productivity at its main motorcycle plant in Hamamatsu, Japan, by 30%.

Suzuki has had the toughest time of the Big Four Japanese motorcycle manufacturers, recovering from the 2008 economic downturn. The recession turned a company record of 3.5 trillion yen in 2007 into just 2.4 trillion yen in 2009. It took until the fiscal year ended March 30 this year for Suzuki’s net sales to return to the 3 trillion yen mark.

One of the key challenges Suzuki faces is returning its motorcycle business to profitability. While its automobile sales have returned annual profits (even despite pulling out of the U.S. market in 2012), its motorcycle operations have struggled. Since the 2008 recession, Suzuki’s motorcycle division has recorded an annual profit just one time, a net profit of 100 million yen from the 2013 fiscal year. That’s small potatoes, considering Suzuki’s motorcycle business averaged an annual net loss of 8.8 billion yen since the 2008 fiscal year.

To spur this turnaround, Suzuki plans to develop products that exhibit the company’s characteristics. Suzuki says it will pursue “fun-to-ride and easy-to-ride” motorcycles with a focus on three basic elements of performance: running, cornering and braking. Suzuki’s new MotoGP program will play a vital role, with its new technologies influencing production models.

For developed markets, Suzuki plans to strengthen sales of parts and accessories. For emerging markets such as Asia, Suzuki plans to consolidate its local manufacturing operations and strengthen its sales network for larger displacement models.

By the 2019 fiscal year, Suzuki hopes to sell two million motorcycles worldwide, a 13.6% increase from the 1.76 million motorcycles sold in the 2014 fiscal year. For North America, Suzuki targets a 50% growth in sales to 60,000 from the 43,000 sold in 2014.

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